Rent Control Efforts in San Jose Look at ‘Just Cause’ Evictions

Cookie Galvan has been pushing for stronger tenant protections after her landlord kicked her out of her home of 10 years in a no-cause eviction.

As a 10-year tenant of the downtown San Jose flat, Cookie Galvan expected her landlord would help exterminate the rats skittering around her tiny apartment. The rodents had chewed up her antique chairs and leather sofa, nibbled on nectarines on the kitchen counter and left rat droppings on her just-shampooed beige carpet.

“An exterminator could have done the job in a single visit,” Galvan, 53, says. “Instead, I was told to buy traps. I was told it wasn’t a big deal. I was told it was my fault for not keeping the place clean.”

For 108 days, she lived with the rats, which kept nesting and breeding in some hollowed-out nook in the wall. She caught 13 of them in traps that left blood splatters on the carpet and dining room table. San Jose code enforcement officers finally stepped in, forcing the landlord of the South Fourth Street complex to fix the problem.

Meanwhile, her gas stove stopped working. For 110 days, she couldn’t bake or cook at home. Despite the rats and broken oven, records show that she paid rent on time. With each check she included a note about the issues plaguing her first-floor apartment. In August 2014, she found a note on her door informing her of an 8 percent rent hike from the $950 she had been paying. This past summer, she got another note—this one said she had 90 days to leave.

“I was well within my rights to complain about the living conditions,” says Galvan, an 18-year San Jose State University employee who works weekends at the SAP Center to stay afloat. “Sadly, he was well within his rights to kick me out for no reason. It’s not fair, but unfortunately it’s legal.”

Raul Peralez

Around the same time Galvan began the onerous task of apartment hunting in one of the most competitive rental markets in the nation, San Jose Councilman Raul Peralez advanced a memo urging the city to bolster tenant protections.

Though he stopped short of making official policy prescriptions—calling the memo more of a conversation starter—the freshman councilman suggested lowering the annual allowable rent increase from 8 percent. He also recommended establishing something called a “just cause” provision to prevent landlords like Galvan’s from kicking out tenants without even saying why.

Current laws allow landlords in San Jose to boot a tenant for any reason. Without a “just cause” ordinance, the city doesn’t keep track of no-cause or no-fault evictions, except for the 1,549 that landlords have self-reported since 2010. If anything, there’s incentive to stay mum since property owners can only bypass rent control if a tenant voluntarily moves out.

“That’s a huge loophole,” says Sandy Perry, a renter rights activist and head of the Silicon Valley-based Affordable Housing Network. “There’s no way to tell if landlords are following the law.”

The better part of this year has been marked by contentious debate between landlords and a burgeoning movement to strengthen rent control. Not since the 1970s, when inflation spiked housing costs in a similarly inequitable economic recovery, has the nation seen such a widespread push for tenant rights. That partly owes to a national increase in the number of renters. The 2008 financial crisis left many people unable or hesitant to own a home, which triggered a nationwide increase in the number of renters, according to the U.S. Census Bureau.

As in the ’70s, the cost-of-living surge has led to displacement and a decline in socioeconomic diversity, as evidenced by U.S. Census data. That decade, California’s home prices went from 30 percent above the national average to 80 percent, according to the state’s nonpartisan Legislative Analyst’s Office (LAO). Today, home prices statewide are two-and-a-half times and rents more than 50 percent over the national average. In San Jose, rents are double the national average and eat up on average more than 40 percent of a tenant's income.

For decades, California subsidized housing construction with bonds, tax credits and other resources. But those programs made up a small share of new homes built—far from enough to meet demand, according to a 2015 LAO report on the affordability crisis. That same study advised lawmakers to come up with targeted programs to spur private housing construction, especially in coastal and urban areas.

"Though the exact number of new housing units California needs to build is uncertain, the general magnitude is enormous," the report states. "On top of the 100,000 to 140,000 housing units California is expected to build each year, the state probably would have to build as many as 100,000 additional units annually—almost exclusively in its coastal communities—to seriously mitigate its problems with housing affordability."

Source: Legislative Analyst's Office

As state lawmakers figure out long-term solutions, counties and cities have more immediate deadlines. In September, with Richmond poised to enact the first rent control regulation in California in 30 years, the California Apartment Association (CAA), Sacramento-based landlord lobbyists, warned its members of a squall ahead.

“Rent control is a hot topic in several municipalities in the Bay Area, and it’s been brewing for months in Richmond,” the industry group cautioned. “If it’s approved here, the rent control movement gains dangerous momentum.”

Soaring rents have become a sore subject in San Jose, whose chasmal wealth gap and stagnant wages have made it an important battleground in the struggle for tenant rights. Last month, the city of a million saw its average monthly rent tick up to $2,856 overall and $2,410 for a one-bedroom. While local landlords often seek tenants who earn three times the cost of rent, many people spend well over half their income on housing or double up with parents and grandparents to share the cost.

The rental boom has generated a windfall for landlords, who have little trouble finding new tenants with San Jose's 3.2 percent vacancy rate. According to real estate site Zillow, residential property owners collected $441 billion in 2014. That's a $20.6 billion uptick from the year before.

As San Jose began studying ways to update its rent laws earlier this year, tenants doubled down on organizing. A band of displaced renters formed the South Bay Tenants Union. Housing advocates staged protests and demonstrations to put a human face on the affordability crisis. The Responsible Landlord Engagement Initiative, a mediator for landlords and tenants, has seen a surge in new neighborhood associations and tenant collectives formed to address code enforcement and quality-of-life issues.

“That’s the beauty of this,” says Jaime Angulo, coordinator of the initiative. “Yes, people are frustrated, but they come together and take ownership of their neighborhood, they form a community around these problems and they generate change.” Those same neighborhood groups, aided by tenant advocates such as Project Sentinel, Tenants Together and public interest law firms, have helped drive the campaign to fortify local rent control.

Since September, San Jose’s Housing Department has been studying how to re-write its rent stabilization ordinance to shift the balance of power between tenants and landlords. They will present their report to a City Council subcommittee on Dec. 7 and bring a proposal up for a vote in the first or second month of 2016.

In addition to adding "just cause" protections, possible changes include adding 10,000-plus duplex units to the city’s rent control ordinance, which now only applies to 44,000 apartment units. The Costa-Hawkins Act—a 1995 state law crafted by the real estate industry—prevents rent control on housing built after 1995 and excludes units already exempted by local ordinances. In San Jose's case, that means rent control only applies to housing built before 1979.

The city will also look at improving enforcement of existing rent stabilization laws. Currently, landlords cannot bypass rent control unless a tenant voluntarily moves out. But city officials admit that no one has been enforcing that, so it’s unclear how many property owners have forced out tenants to up the rent to whatever the market will bear.

There's concern, however, that too much regulation could hurt mom-and-pop landlords who take care of their tenants and rely on the extra income. Two-thirds of all apartment owners in the United States are individuals, not corporations, according to U.S. Census data. Plus, with state law limiting rent control caps to apartments built before 1979, there's concern that stricter rent laws would place undue burden on landlords of older buildings.

In September, the CAA rallied some of its 13,000 members to send hundreds of letters to San Jose leaders. Instead of rent control, they argued, the city should drum up incentives for property owners and focus on building up its supply of affordable housing. "[It's] not equitable to put price controls on a market-driven economy," Keith Adams, a local landlord, wrote. Others argued that the city doesn't need policies to protect responsible tenants—landlords already do that.

Ultimately, it's up to the City Council to decide how to balance property rights with safeguards for tenants, and quick fixes with long-term solutions to the region's housing shortfall.

“Property owners really want a simple and expedient way to terminate a tenancy, particularly if they feel they have a bad tenant,” San Jose housing policy analyst Wayne Chen says. “On the tenants side, they feel that they don’t have the power, that with landlords there’s an inherently disparate power relationships.”

Though it’s too little, too late for Galvan, her story has become another case study on the chasmal regulatory gaps that leave even stable, college-educated and full-time job-holding tenants scrambling to keep a roof over their heads. No-cause evictions have become commonplace, while the worst-case examples of weak tenant protections have literally scarred people for life.

In June, apparently faulty electrical wiring from old stoves destroyed Sunny Apartments, an aging complex on Story Road. With her apartment engulfed in flames, Amelia Gomez, a single mom, made her 10-year-old son, Julio, and 12-year-old daughter, Abigail, to leap from the second-story window into the arms of neighbors below. The fire melted flesh on more than half of Julio’s body, while Abigail came away with burns under her arms and on her torso.

“Tenants were complaining for years about the wiring,” says Gloria Zamudio, president of the Arbuckle Neighborhood Association, which helped the Sunny Apartment renters to bring their case to the city. “They didn’t have working smoke detectors. The floors were buckling. They had rats, insects—all kinds of horrible living conditions. But until they all got together and organized, they were too afraid to press the issue.”

Click here to read the code enforcement history for the Story Road apartment. The landlord, Hee Duk Kang, has not returned calls for comment. In media reports earlier this past summer, however, he said he took care of the property just fine.

Kang gave a similar defense in 1991 before pleading no contest to bribing a building inspector. The landlord—branded a slumlord by prosecutors—wanted officials to turn a blind eye despite having racked up more than 1,000 violations at a 100-unit apartment complex in East Palo Alto. A judge told him that if he kept the place up so well, he should serve his house arrest sentence at the same apartment. In 1998, a tenant sued him after her 2-year-old son fell from a dilapidated balcony at the same apartment.

Zamudio worries that without a "just cause" ordinance, San Jose renters will continue to put up with dangerous living conditions for fear of losing their home. In September this year, another apartment caught fire on Story Road reportedly because of a similar lack of upkeep. That same month, the second-story walkway buckled at an apartment near City College because of a landlord’s refusal to fix rotted-out beams.

“This goes beyond rent control,” says Susan Price-Jang, who has advocated for low-income and undocumented tenants who have been too afraid to speak up about substandard living conditions. “We need better training for city staff, we need recourse for tenants and accountability for landlords.”

> “An exterminator could have done the job in a single visit,” Galvan, 53, says. “Instead, I was told to buy traps. I was told it wasn’t a big deal. I was told it was my fault for not keeping the place clean.”

Jennifer:

We could do a scientific experiment.

We could put Cookie in a pristine apartment with no rats right next to you, see if she keeps the place clean, or if the rats come back.

At $950/month Ms, Galvin was paying a mere 40% of the Average rent for a single bedroom apartment. That is a 60% discount !

I wonder if the landlord may have recently acquired the property and inherited the tenants and existing leases or if he is just a lousy business man who don’t charge enough rent to cover the expense of upkeep on his property.

Property maintenance costs money and the economy has a very biased way of dictating costs… a business can operate on the red for a short time for tax purposes but at some point it has to earn which means rent is going to rise.

If I take risks and invest my money then the government should get off my back. Why should anybody be entitled to special treatment from private citizens? If the rent is high in California go to Texas. Stop this culture of give me give me.

Cookie kept her house like a museum. Totally spotless. The rats were in the whole building not just her apartment. They probably still are. No one else there is willing to say anything because Cookie was kicked out. I live right next to Cookie and trust me she was not asking for special treatment. there was rats in the walls and the landlord was constantly blowing her off. It was gross. She finally had to go to the city to get him to take care of it. The landlord got upset because he did not want to pay for an exterminator and gave her a notice to leave. It’s absolutely bizarre. Cookie is as conservative as they come trust me she is not entitled at all. She had low rent rates because she moved in 9 years ago. She is single and works at a College helping students. Her moving to Texas would be a loss to California.

No one is entitled to below market rents. Landlords are entitled to a market return on their investment. If you can’t afford the rent YOU need to move. Not create more laws and BS regulations to protect yourself at the expense of other.

Is no one amazed that these people can hardly afford Below Market rent? I can’t side with the tenant or the landlord since it’s the laws and regulations of our state that have implemented this issue to begin with. Housing continues to spike beyond the affordability of the average tax payer yet incomes trickle along at slug speed. And this make sense enough to defend?

Our society teaches us the importance of balance and equalization but what’s the purpose of these teachings when our own regulations can’t even abide by basic principles of High School economics.

> Housing continues to spike beyond the affordability of the average tax payer yet incomes trickle along at slug speed.

All of the available housing is affordable by someone.

The problem with the socialist activists, is that they want to kick someone out of an occupied house and give it to someone that the activists judge to be “more deserving” simply based on tribalist narratives.

> And this make sense enough to defend?

Explain something, Valerie. How is it that your tribe doesn’t have enough housing but other tribes do?

And your solution seems to be to organize your tribalists into a raiding party and take housing from other tribes.

What else do you want to take from other tribes? Food? Goats? Women? Slaves? Land?

I suspect that you probably live in an ethos of permanent tribal warfare.

If San Jose rents are too high, there would be no tenants to fill the vacant units. The rents would drop to fill the vacancy. This is basic economics. By forcing limits like rent control too far from its natural course, causes other problems. No one will operate a rental if they cannot get the market rate. They will take their money and put it somewhere else, leaving fewer rentals available on the open market. This will drive rents even higher. San Francisco and Berkeley have some of the most restrictive rent control laws in the country and also some of the highest rates homelessness. Highly restrictive rent control hurts the very people it is trying to help.

I just received a 90 day “no cause” eviction notice. Very upsetting. I have been living in my apartment in west san jose for almost 6 years. When i moved in, the rent was $950/mo. Its increased through the years, as of this past Nov. its now $1340/mo. These units are going for way more than that to new tenants. I pay my rent on time, i live alone, quiet and obey the rules.

I not only have documents of requests to mgmt to repair my leaking dishwasher and other repairs that have not been fixed, but i also have countless letters of harrassment and the complex has code enforcement violations that were never taking care of.

This is not fair. Im worried, scared and dont know what im going to do. Im not giving up.